New Cars Now Out of Reach for Many?
Report suggests middle-class norm becoming harder to achieve.

The prevailing conditions are translating to wealthy consumers buying a bigger share of new cars.
IMAGE: Kris Lucas
A recent Bloomberg report characterized pandemic-era car price trends as a permanent shift and declared that owning a new car has become a reality only for the rich instead of the middle-class norm it’s been for decades.
Citing U.S. Bureau of Labor Statistics data, along with other sources, the news provider pointed out that average monthly new-car loan payments in the U.S. stayed at about $400 for a decade. Now they stand at a record $777, almost double the level in late 2019, shortly before the pandemic, it said, citing Cox Automot ive figures.
That level of expense for one vehicle is at the limit of how much the typical U.S. household can afford and cover other expenses, Cox Chief Economist Jonathan Smoke told Bloomberg.
“The idea of a new car in every American’s driveway is not the world we live in,” Cox Senior Economist Charlie Chesbrough said.
According to J.P. Morgan, the average new-car price in the U.S. is nearly $50,000, a 30% spike from 2019, Bloomberg said. A used model averages about $27,000, according to a Cox statistic.
Carmakers are focusing on producing fewer and more expensive models, Bloomberg said, pointing out that Ford’s gross profit rose 4.4% year-over-year in 2022 and General Motors’ adjusted earnings rose about $200 million, even as automakers as a whole sold 8% fewer vehicles, the least in a decade.
Similar trends have taken shape in Europe and Asia, the publication reported. For example, new-car prices in Europe are at all-time highs.
And it looks like, despite recently increased inventories and slightly lower prices as a result, pricing won’t return to prepandemic normals, Bloomberg said. Before, U.S. manufacturers produced as much as they could and offered generous incentives to buyers in order to sell as many units as possible, maintaining up to 100 days’ worth of inventory. In January, U.S., supply stood at 57 days’ worth, according to Cox. Bloomberg said that’s in order for manufacturers to keep overhead low and prices elevated.
“We’ll never go back to the inventory levels that we were at in the past,” GM CEO Mary Barra told investors last year.
Ford, Toyota and Nissan have said they plan to avoid keeping billions of dollars in inventory on hand or offering buyer incentives to thin it.
Still, as inventories increase due to easing of supply-chain slowdowns, some carmakers have said new-car prices should fall. But the chip shortage is projected to continue, keeping them from falling dramatically. Used-car prices should drop only about 4% this year, partly because leasing is down, Smoke at Cox told Bloomberg.
The prevailing conditions are translating to wealthy consumers buying a bigger share of new cars. Almost 30% are in households earning more than $150,000 a year, up from 22% in 2016, Bloomberg said, citing consultant AlixPartners.
“The bottom part of the market sort of fell out,” said AlixPartners Managing Director Mark Wakefield.
LEARN MORE: Inventory Dips in January
Originally posted on Auto Dealer Today
More Showroom

California Sees Quarterly Gains
California’s new-vehicle market saw a boost in hybrids in the third quarter and its first overall quarterly market gain of the year.
Read More →
New-Vehicle Prices Stay Put
Affordability pressures and model availability shaped new-vehicle sales in September, according to an analysis by Kelley Blue Book.
Read More →
EV Buyer Consideration Shifts
What drives American consumers to purchase an electric vehicle is shifting as the question moves away from Should I?' to 'Which features and experience do I want to have?'
Read More →
Year-to-Date Auto Sales Holding Their Own
A forecast through August shows that automakers have shifted strategies to keep deliveries and revenues up despite tariffs and other economic challenges.
Read More →
Slow to Robo
Ten years of polling consumers shows autonomous vehicles’ profiles have risen considerably, but even more people now want at least some level of control if they go that route.
Read More →
Dealers a Little Down
A third-quarter Cox Automotive survey finds them in a mixed mood, bummed by fallen customer traffic but encouraged by better profits, costs and EV interest.
Read More →
European EV Sales Skyrocket
The EV market on the continent held strong in July with almost 25% of new-car sales being fully electric units, a stark contrast to the U.S., where EV sales declined about 42%.
Read More →
Mitsubishi Unveils U.S. Plan
The automaker announced a strategy that includes an expanded lineup and dealership presence, along with more ‘rugged’ and electric models.
Read More →
Used Lots Getting the Business
Many consumers are seeking out the units to save money, and the demand – higher in July than normal – is keeping supply limited and prices up.
Read More →
Used Market Stabilizes
The Carfax Used Car Index noted a major drop in used-vehicle price increases in July after several months of hikes.
Read More →